UNITED NATIONS
ECONOMIC COMMISSION FOR AFRICA MULTINATIONAL PROGRAMMING AND OPERATIONAL CENTRE (MULPOC) FOR
WEST AFRICA
DISTR. : LIMITED
ECA/M1E/NIA/XV/97/01 /RV. 1
DECEMBER 1996 ENGLISH
ORIGINAL : FRENCH
ASSESSMENT OF ECONOMIC AND SOCIAL CONDITIONS IN WEST AFRICA
TABLE OF CONTENTS
TITLES
PARAGRAPHS INTRODUCTION.
"" - 1-7
CHAPTER I
GENERAL SURVEY OF THE WEST
AFRICAN ECONOMY
■ • 8
I. THE GROSS DOMESTIC PRODUCT GROWTH PATTERN
A. THE OVERALL SITUATION
■ y
1) THE SITUATION IN 1994-1995 10_]2
2) THE SITUATION IN 1995-1996 13-14
B) THE SITUATION IN THE UEMOA COUNTRIES
1) PERIOD 1994-1995 {
2) PERIOD 1995-1996 '
■'
■ • • 1 o-1 y" in
C) THE SITUATION IN THE NON-UEMOA COUNTRIES
1) PERIOD 1994-1995
2) PERIOD 1995-1996 ..."...Z..Z. 21-22
D) CONCLUSION
'H-j *
: ■■■■ .-. ■ -.- ■ ■ ■; 3
II. RATES OF INVESTMENT PATTERN
A. THE OVERALL SITUATION , 27-38
B. THE SITUATION IN THE UEMOA COUNTRIES....;...,..,...39^43 C. THE SITUATION IN THE NON-UEMOA COUNTRIES. ...44-49
III. THE EXTERNAL TRADE PATTERN
A. THE OVERALL SITUATION 50-58
B. THE SITUATION IN THE UEMOA COUNTRIES... .59-65
C. THE SITUATION IN THE NON-UEMOA COUNTRIBS 66-68
CHAPTER II
THE TREND OF THE MAJOR SECTORS ...:... 69-72
1. STATE OF AGRICULTURE
A. THE OVERALL SITUATION 73-74
B. THE FOOD-CROP FARMING SITUATION PER
COUNTRY IN 1997.... ...:... .;.... 75-110
C. CASH-CROP FARMING ...Ill
1) COCOA 112-123
2) COTON ., ...124.132
3) COFEE 133-136
II INDUSTRIES. ...:...::.:...,...137438
A. THE MANUFACTURING SECTOR 139-143
B. THE EXTRACTIVE INDUSTRIES 144-146
1) GOLD 147-150
2) ENERGY..., 151-155
3) OTHER MINIRALS ...156-158
CHAPTER HI
HUMAIN RESOURCES -o
1. QUANTITATIVE ASPECT OF THE RESOURCES
A, STATE OF THE POPULATION
1) POPULATION GROWTH — ...--159-162
2) CAUSES OF POPULATION GROWTH... ...163-164 3) EFFORTS MADE IN POPULATION MATTERS ...165-178
B.
AGE STRUCTURE OF WEST AFRICAN POPULATION. 179-186
II. QUALITATIVE ASPECT OF THE RESSOURCES
A. EDUCATION
B. HEALTH...
C CONCLUSION—■ 201~205
D.
C
STATE OF HUMAN DEVELOPMENT IN WEST AFRICA...206-221
CHAPTER IV.
SOCIO-ECONIMIC DEVELOPMENT PROSPECTS IN 1997 ...222-230
I) GDP GROWTH PROSPECTS ....231-239
II) HUMAN DEVELOPMENT
PROSPECTS ■ 240-245
^^!A^f^^^^ "if
INTRODUCTION
1. West African countries, like the other developing countries, have had to adopt Structural Adjustment policies in order to face up to the economic and financial difficulties brought about by external chocks and mediocre results of national economic policies. These Adjustment policies have helped reverse the economic decline experienced in the " 1980s" and stimulate economic growth in several countries. However, the GDP growth per capita is still low; some brain-storming questions as to the efficacy of the reforms are, therefore, raised.
That is why it is absolutely necessary to examine the different economic sectors in order to identify the bottlenecks and define the short, medum and long-term actions to be undertaken.
2. In this regard, the first chapter of this survey is devoted to a general survey of the West African economy. The survey was conducted on the basis of the development, during the triennial period 1994-1996, of three (3) indicators, namely: growth rate of the Gross Domestic Product (GDP), rate of investment and balance of trade.
3. In this chapter, the analysis shows the comparative performances between the countries of the "Union Economique et Monetaire Ouest Africaine (UEMOA)'1 and the member countries of the Economic Community of West African States (ECOWAS) which do not belong to UEMOA. The objective of this approach is to assess the impact of the devaluation of the CFA franc which took place in January 1994, on the competitiveness of the "Union"
and to show the efforts made by this group of countries to move from monetary to economic union.
4. This form of economic integration (currency before economy) can it serve as reference for the West African subregional integration within the Economic community of West African States (ECOWAS)? There is a second chapter which will deal with the trend of the key sectors of the West African economy, namely: agriculture and industry. These sectors are still the main supports for economic growth in the West African subregion.
5. Although the Adjustment Programmes are necessary, they are not enough to stimulate economic growth if some appropriate accompanying measures are not taken. A third chapter is, therefore, devoted to these problems to show the need to continue to invest in human capital. Indeed, the previous years, characterised, by modest growth and decline of income per capita, were accompanied by degradation in living conditions and deterioration of the
employment situation. :
certain socio-economic indicators, the social situation in the West African countries, based mainly on data collected from Organisations of the United Nations System (ECA, UNPF,
UNDP, IMF, WB, ILO, FAOetc...).
7. Finally, a last chapter devoted to socio-economic development prospects of the
subregion in 1997. .
H.B. Except shere otherwise stated, the dollar quoted in this survey is the American dollar, in 1990 coiistant value. The GDP is expressed in constant market price... . : ■
CHAPTER I
GENERAL SURVEY OF THE WEST AFRICAN ECONOMY
8. West Africa's macro-economic situation was assessed from the trend of the following indicators: Gross Domestic Product (GDP), rate of investment
(RT) and balance of trade (BT).I. THE GROSS DOMESTIC PRODUCT (GDP) GROWTH PATTERN
A. The overall situation
9. The following Table illustrates the GDP growth pattern for all the West
African countries.constant values (in billions of dollars)
Titles Countries
1994 Billions dollars
1995 Billion Us dollars
1994/1995 Growth rate
1996 Billion US.
dollars
1995/1996 Growth, rate
BENIN
BURKINA - FASO CAPB-VBRDB GAMBIA GHANA GUINEA
GUINEA-BISSAU j1
CGT8-D!IV0IKE LIBERIA MALI MAURITANIA NIGER NIGERIA SENEGAL SIERRA LEONE TOGO
EKTIRE WEST AFRICA
UEMOA COUNTRIES
NON-UEMOA COUNTRIES
2.133 3.174
■ 433 333 7.568 3.307 289 9.913 1.184- ■ 2.550 . 1.187 2.468 37.602 5.822 814 1.408 80.385
27.468
52.917
2.307
■ 3.366 448 343 8.092 3.453 292 10.567 1.184 2,703 1.237 2.561 38.709 6.087 834 1.502 83.685
29.093
54.592
8.1 \ .'6.0 i-
"■■ 3.4%
3.0 \ 6.9 \
• 4.4 * ' ■ 1.0 \ 6.5 \
6.0 \ 4.6 \ 3.7 \ 2.3 \ 4.5 \ 2.4 \ 6.6 \ 4.1 \
5.9 \
3.1 \
2.439 - 3.460 ■
448 343 8.652 3.511 292 11,264 , 1.184 2.833 1.321 2.693 39.869
6.364 . 834 1.577 87.084 ■
30.530
56.454
5.7 \
■ 3 \
-
6.9 \ ' . .1.6 % ■;
-
6.5 1
■ 4.8 *■
6.7 \ 5.1 \ 2.9 \ 4.5 \
-
4.9 \ 4.0 \
5.2 4
3.4 *
1) Situation in 1994-1995
10. The GDP growth rate for the entire subregion in 1995 was 4.1 percent. It is Benin which recorded the highest growth rate with 8.1 percent; followed by Ghana with 6.9 percent and Togo 6.6 percent successively. The growth has been sustained by the UEMOA countries,
Ghana and Mauritania.
11. In contrast, Guinea-Bissau, Liberia, Nigeria and Sierra Leone recorded the lowest growth rates with 1.0, 0, 2.3 and 2.4 percent respectively. The situation is alarming in Liberia, where the GDP has constantly maintained a low growth rate since 1994.
12. Undoubtedly, the socio-political upheavals (civil war, political instability) which have, for a long time, characterised that country, have had an adverse effect on economic activity.
2. Situation in 1995-1996
13. The GDP growth rate in 1996 for the entire subregion, was 4.0 percent, but with some wide differences from country to country.
14. The highest growth rate recorded in 1996 was that of Ghana (6.9 percent) successively followed by Mauritania 6.7 percent, Cote d'lvoire 6.5 percent, Benin 5.7. percent, and Niger 5. i percent; The most remarkable decline was observed in the Republic of Guinea where the GDP fell from 4.4 to 1.6 percent. Cape Verde, Gambia, Liberia and Sierra Leone recorded the lowest growth rates in the subregion. The GDP, in terms of volume, virtually remained unchanged in these four countries as compared to its 1995 value.
B. THE SITUATION IN THE UEMOA COUNTRIES
1) Period 1994-1995
15. The GDP growth rate for the entire zone was, on average, 5.9 percent - a performance the zone has never recorded'for nearly a decade. It is the positive effect of the devaluation of the CFA franc.
The growth rate of 8.1 percent recorded in Benin, was the highest in the zone, followed successively by Togo, 6.6 percent, Cote d'lvoire 6.5 percent, Burkina Faso 6.0 percent, Mali 6.0 percent, Senegal 4.5 percent and Niger 3.7 percent.
2) Period 1995-1996
16. The GDP growth rate in the UEMGA zone, two years after the devaluation,, is still 5.2 percent, on average. ■ ■ ■ '■.''. ■ "■■
17. In 1996, it was Cote d'lvoire which recorded the highest growth rate in the zone with 6.5 percent, then by a decreasing order: Benin 5.7 percent, Niger 5.1 percent, Togo 4.9
percent, Mali 4.8 percent, Senegal 4.5 percent and Burkina Faso 2.7 percent.18. It can, thus, be affirmed that the trend of the economic situation of UEMQA is characterised by resumption of growth after the devaluation, even pursuit of disinflationary policy, one of he priority objectives of the common monetary policy has made it possible to
preserve the gains of competitiveness obtained after the devaluation.19. Indeed, the rate of inflation fell from 36 percent in 1994 to 6 percent in 1995 (1). Most of the countries of the zone also experienced favourable rainfall conditions for three consecutive seasons, favourable world prices in 1994, and 1995 for most of its export commodities (apart from oil), while benefiting from an exceptionally substantial foreign
technical assistance in 1994.
C. THE SITUATION IN THE NON-UEMOA (2) COUNTRIES
1) Period 1994-1995
20. The growth rate of this group of countries, in 1995, was, on average, 3.1 percent. In 1995, it was Ghana that recorded the highest growth rate with 6.9 percent, followed successively by Mauritania 4.6 percent, Guinea 4.4 percent, Cape Verde 3.4 percent, Gambia 3.0 percent, Sierra Leone 2.4 percent, Nigeria 2.3 percent, Guinea-Bissau 1.0 percent and
Liberia 0 percent.
2) Period 1995-1996
21. The GDP growth rate, in 1996, for the entire zone was 3.4 percent.
22. Ghana recorded the highest growth rate in the zone with 6.9 percent, especially due to the increased efforts to rectify the shortcomings of the past. Moreover, sharp increases in
the world price of cocoa and increase in output of gold were expected to improve the exportrevenue of that country. Ghana was successively followed by Mauritania 6.7 percent, Nigeria 2.9 percent and Guinea 1.6 percent. As for the other countries such as: Cape Verde, Gambia, Guinea-Bissau, Liberia and Sierra Leone, the GDP, in terms of volume, was similar to that
of 1995 and 1996. .
TO Monde en Developpement - Tome 23, 1995, Huaero 92, Page 110
® By "Nofl-UBMOA zone" is meant'the ECOWAS countries which do not belong to
11
D. CONCLUSION
23. The comparative performances of the two zones (UEMOA and NON-UEMOA), show that, during the period 1994-1995, the UEMOA countries recorded the highest growth rate in West Africa. The growth rate of the UEMOA zone, in 1996, was twice that of the NON- UEMOA zone.
24. The economic situation of the zone improved after the devaluation of the FCFA.
These results should, however, be appraised with care. For, as the mechanical effect of the devaluation is over, maintenance of a high growth rate implies expansion and diversification of exports and, hence, improvement in the competitive position of the UEMOA zone; a situation which wili necessitate stepping up investments and increasing the gains of productivity, which, in turn, depend on the structural adjustment efforts. The regional integration efforts should also be strengthened, through encouragement of synergies and complementarities of the economies of the region as, regional integration is an accompanying measure of the devaluation meant to ensure revival of competitiveness and resumption of a lasting economic growth <*>. Most of the NON-UEMOA countries (with the exception of Ghana, Mauritania and, to a lesser extent, Nigeria should also make more efforts to ensure lasting and cumulative increase in their GDP.
25. It is observed that the UEMOA zone, together with the NON-UEMOA countries witness real progress in budgetary matters. The routine receipts improved while current expenditures were contained. However, considerable efforts still need to be made in the area of recovery of fiscal returns whose base should be widened by resorting to lump-sum
taxation.
26. It is also important to analyse the rates of investments with a view toensuring lasting GDP growth in West Africa.
II. TREND OF RATES OF INVESTMENT
A) The overall situation
27. The following Table illustrates the trend of rates of investment in West African countries.
131 . cf J. DELORS: MOWDE EB DEVELOPPSHSHT - Tome 23 - 1994 Numero 92, Page 1G&.
Table 2: Rates of investient pattern
Average rate of investment
1994-1996
Source: ECR/SECRETARIAT for the crude figures
}The rate of iavestient is calculated by the ratio
1 GFCF
Stock variations GDP
GFCF GDP
Gross fixed capital formationGDP Gross Domestic Product
13
28 The rate of investment in West Africa-has.remained at a relatively constant level
8 on average) from 1994 to 1996 (Africa 19.1, Asia 31.1). The highest average rate o
GDP)- this rate has even been constant since 1994. There is no doubt that the pohttcal stability of that country has been a favourable factor for investment, coupled w»th the desre of the Government to promote the private sector, which has made the internal donor community .end its support, thereby, making Cape Verde more attractive than*eote countnes. For examp.e, on 21- October, 1996, the World Bank granted a substan >a. a,d meant to support Cape Verde's private sector -In spite.of the high rate of mvestment, Cap Verde recorded a very low growth rate. It should, perhaps, review its mvestment fmancmg policy by giving priority to sectors capable of inducing growth and development; ,tis proved that iris not simp.y a matterof time lag between investment and their effects on growth.
29 Cape Verde is followed by Gambia (40.9 percent). These is every reason to believe that in West Africa, the countries which recorded the highest average rates of mvestments experienced^ lowest GDP growth rate, This is certainly 4ue (as pointed out esrheron) tt>
the productivity of the investments funded; as the two countries.are undoubtedly mtereaed in the less productive sectors of their economies or in those where propagafon of effects
slow.
30. Liberia, on the other hand, remains the West African country with the lowest rate of
investment (3.2 percent)'■While it cannot boast of any growth, at all.
31 As a matter of fact, this situation is explained, among others, by the fact that the Liberian economy is in total stagnation, in view of the slow-down in economic activity m the
zones ravaged by the war.The marginal efficiency of capital is too low in that country.
I5). HarchSs tropicaiix/Hoveita 1996, Page 2334.
32. Then follows Cote d'lvoire with an average rate equal to 10.1 percent of the GDP(6);
(6lthis counter-performance can be attributed to a possible risk of political instability due to democratic developments and the succession ofthe late President of the Republic. It should, however, be pointed out that the rate of investment increased from 9.1 percent in 1994 to 10.7 percent in 1995 and remained stable in 1996. Faced with such low growth rate, Cote d'lvoire made some efforts to revive investments, especially, foreign investments. Indeed, the economic bureau ofthe Embassy of C6te d'lvoire in Washington, in conjunction with the American cabinet Alexis International Inc. organised a forum in Houston on 26* and 27*
September 1996, to promote investments in Cote d'lvoire.
It was the third forum of that kind in 1996, after the two previous ones held in San Francisco, California, and in Tempa, Forida. It concluded on an enlightenment campaign
aimed at arousing the interest of the American business circles in Cote d'lvoire, at a time when there are signs of a vigorous economic recovery in that country.33. In Ghana, the rate of investment which was, on average, 15.9 percent during the triennial period, increased from 15.5 percent in 1994 to 16.2 percent in 1995 before
stabilising at this rate in 1996. This can be attributed to the fact that, most of the investmentsmade were profitable, considering the better performances achieved by that country, thereby, rendering the Ghanaian economy attractive vis-a-vis foreign investments which were also encouraged in 1992by a favourable amendment to the investment code of 1985.
34. Sierra Leone and Senegal had the same average rate of investment during the period 1994-1996 (14.1 percent) with a measure of progression from 1994 to 1996.
35. There has been some improvements in these countries since 1994. Generally, in West
Africa, foreign direct investment slightly increased in countries which had improved their
macro-economic policy.
W, Indeed, in connection with an analysis of the comparative performances with regard to investments in the 0EMO& countries, Mr EMHAHIJEL PIHTO SOREISA (Bniversite de Saucy II), who in analysing the Gross Domestic Investment per capita ended up with the sane results. Cf HOHDE EN DHVELOPPEHEHT - TOME 23-1995 -
92. Page Ul.
15 36. It should, however, be noted that the relatively low rate of investment in many West African countries does not constitute any major obstacle to growth revival in the short-term, especially if this low rate of investment is compensated by better efficiency of the
investments. But in the long run, investment remains the only sure prime mover of a lasting
development. .
37. According to the World Bank (7), "Africa should increase investment to about 25 percent of GDP in order to achieve a GDP growth rate of about 6 percent a year". Apart from Gambia and Cape Verde which have funded some investments whose macro-economic effects are still being awaited, no other West African country has attained the level recommended by the World Bank.
38. Thus, these countries are expected to carry out some administrative reforms, making it possible for private investment to expanci its scope of operation, avoid, especially, some eviction effects between the public sector and the private sector; they should also eliminate any discrimination against some subreginai investors who are agents of integration.
florid Bank report on Development Policies, Adjustment in Africa: reforis, results and what remains to be done. Page 175 . ..-■.-...
B/ THE SITUATION IN THE UEMOA COUNTRIES
39. On average, the rate of investment obtained in the UEMOA zone was almost similar to the rate obtained in West Africa (14.4 as against 14.8) as a whole. The highest average rates of investment of the zone were obtained in Mali and Togo (24.7 and 24.4 respectively).
Followed by Burkina Faso, Benin and Senegal. Cote d'lvoire and Niger have been recording the lowest average rates of investments of the zone.
40. The trend of the investment indicator shows a tendency for rectification of performances in the UEMOA countries. This past period has witnessed recovery of the investment performances of Least Developed Countries of the UNION (Benin, Niger and,
especially Burkina Faso, Togo and Mali). At the same time, Cdte d'lvoire has been recording
some very remarkable counter-performances; yet she has the highest income per capita.
41. It is against this background that the execution of Adjustment Programmes in some of the countries (Benin, Burkina Faso, Mali, Niger and Togo) and the democratic transition have restored confidence and encouraged revival investments. This performance can also be attributed to the monetary policy accompanying the devaluation. As a matter of fact, after the devaluation, interest rates were raised, essentially, in order to strengthen the currency, reduce inflationary tensions and sustain local savings, particularly, by encouraging the return of capital deposited abroad. The year 1995 was characterised by revival of investments", more resources were allocated to public investment expenditures which generated private investment"(8).
42. However, recovery, if any, is still insignificant and fragile: the performances of some of the less privileged UEMOA countries are still modest. It should be pointed out that Senegal is in the process of preparing a national programme for promotion of regional investment under the general framework of management of regional economy, accessibility and regional credit(9>.
M. Marches Tropicaux - 27 septette 1996: le Rapport 1995 du Comity Monetaire de la Zone Franc: de
Reel progres. Page 2055.
(9). Republique du Senegal: Direction de la Planification: Promotion de I'investissement Regional: Phase
diagnostic : Septembre 1995
^^
17
43. As concerns privatisation in the UEMOA countries, several governments have, in recent years, decided to disengage from production and commercial activities and have re structured and privatised public enterprises. But the progress has been slower than expected.
The devaluation had two (2) opposing effects: "on the one hand, it aroused the interest of potential rescuers, on the other hand, it created some doubts in the mind of certain decision- makers who resorted to privatisation to free themselves from a financial millstone, but were
not inclined to relinguish their hold whenever investment became profitable" 10. From
financial point of view, it is the time to sell whenever the market becomes buouyant. From economic point of view it about time productivity improved, for, the mechanical effect of the devaluation on economic competitiveness of the zone has now been attained.44. Generally, the average rate of investment (during the period 1994-1996) in the NON- UEMOA countries is almost similar to the average rate recorded in West Africa (15 percent as against 14.8 percent). In this category of countries, the highest aveage rate of investment was obtained in Cape Verde and Gambia with 45 percent and 41 percent of GDP respectively. The high rate of investment in Cape Verde is: attributed, among others, as indicated earlier on, to the political stability, efforts made by the Government of Cape Verde under the framework of promotion of the private sector and the support of the International Financial Community, particularly, the World Bank; It is the performance of Gambia which seens paradoxical, considering the great socio-political crisis that shook that country in the
recent past.
45. Then follow successively Guinea, Sierra Leone, Mauritania, Guinea-Bissau, Nigeria and Liberia.
tones Tropicaux 26 Janvier 1996: Rapport d'un Consultant de la Bangue Hondiale: On premier Ulan
de la devaluation dirFranc CFfi a tin ^ceobre . 10.
C. THE SITUATION IN THE NON-UEMOA COUNTRIES
46. It is especially the performance of Nigeria which can perhaps, be attributed, to the socio-political upheavals and especially the decision to place embargo on that country. Such events might, among others, have influenced decisions to invest in that country in spite of the high marginal efficiency of capital. Moreover, looking at the statistics of Table 2, one observes a sharp decline in rate of investment from 1994to 1995 (year of troubles in Nigeria) decreasing from 14.4 percent to 9.2 percent before shooting up in 1996 to reach the level
attained in 1994.
47. The state-disengagement operations in these sample countries are also progressing slowly with regard to Small and Medium-scale Enterprises (SMEs) and hardly, in the case of the big companies, often classified as strategic. Some fragmentary data (11) tend to show that financial contributions by the States to Public Enterprises are still substantial.
48. It should, however, be pointed out that Ghana has recently privatised some gold and diamond mines, a brewery and several medium-size manufacturing enterprises, Nigeria has sold out several hotels and a fuel-distributing company to private investors" (12). It will, therefore, be necessary to accelerate the privatisation process in these countries which have opted for economic liberalism.
World Bask Report on Development Policies. Adjustment in Africa: reforms and what remains to be
done, Page 117.
florid Bank Report on Development Policies. Adjustment in Africa: reforms, and shat remains to be
done, Page 119.
49. In conclusion, it is observed that the rates of investments obtained in the NON- UEMOA countries are slightly higher than those of the UEMOA countries. This is attributed, partly, to the fact that before the devaluation and, in spite of the adjustment policies adopted by the UEMOA countries, the real exchange rate of the zone was overvalued and the terms of exchange had deteriorated; this situation was worsened by the fall of the dollar in relation to the French Franc (hence, in relation to the F CFA). The end result was a deterioration in public finances, stagnation and an increasing informalisation of the economies of the UEMOA countries. As a corollary, this situation had led to suspension of International Monetary Fund (IMF) remittances to the UEMOA member countries and, undoubted disinterest of a great number of foreign investors in these countries. The proof of this situation is that after the devaluation, the rates of investment started rising in the UEMOA countries; and observers saw the magnitude of the contributions of the BRETTON-WOODS institutions and the
promptitude with which agreements were concluded (in September, 1994, fourteenagreements with the members of the franc zone were approved, out of which eleven were effected as early as end of March) (!3), this situation undoubtedly, helped restore the
confidence of foreign investors.
(U1. HQHDES EN DBVEL0PP2HSHT: TQ8E 23 - NUH8R0 92 PAGE 106.
III. THE EXTERNAL TRADE PATTERN
Table 3: Trend of Balance of Trade (14) of West AFrican countries (in billions of US$)
Source: ECA SECRETARIAT FOR THE CRUDE FIGURES
^14'. Balance of trade is obtained by striking the difference betseen Exports (X} and Imports (H)
(S = I - H).
COUNTRIES -
i ■ i
YEARS
■ • • ■ ' —I
1! i! i!
COUNTRIES 1 . . 1994 , .' | 1995. | 1996
i .ii ii u
■ BENIN
1 " ■ '
\ ■ 1
BDRKIE-FASO an verde GAMBIA GHAIA GUIHEA GUINEA-BISSAU COTE D-IVOIRE LEBERIA mali MAURITANIA NIGER NIGERIA SENEGAL SIERRA LEOIE TOGO
OVERALL
OUT OF WHICH UEMOA
OUT OFJHICH NQN-UEMOA i
. • II
+ 0.007 : 1 + 0.028
-■ - 0.719 ..
- 0.155 - 0.086 : - 0.639' - 0.115 - 0.067 - 0.948 - 0.050 - 0.201 - 0.039 t 0.022 + 2.476 - 0.139 - 0.142 + 0.111 + 1.212 f 0.029 + 1.183
- 0.773 - 0.159 - 0.099 - 0.608 - 0.137 - 0.069 + 0.718 - 0.050 - 0.189 - 0.014 + 0.057 + 2.536 - 0.046 - 0.147 - 0.095 - 0.981 - 0.300 - 0.681
, , .
" + 0.030
. . ...
■ 0.795.
- 0.159 - 0.099 - 0.650 - 0.139 - 0.069 + 0.765 - Q.050 - 0.198 + 0.015 + 0.044 + 2.611 - 0.040 - 0.147 - 0.099 + 1.100 - 0.213 1.313
21 A. The Overall situation
50. Generally,, Africa generates surplus trade balances. The balance reduced from 1.212 billion US dollars in 1994 to 0.981 billion US dollars in 1995, then shot up again to 1.1
billion US dollars in 1996.
51. This trade balance is attributed, to a large extent, to Nigeria's trade surplus-Nigeria
which is the leading,country of the subregion. Indeed, during the period 1994-1996, and foreach year, it is Nigeria which has the higliest trade surplus and the difference vis-a-vis the
other countries is very great.
52. Another remarkable fact is that the trade surplus of this country has been progressing
constantly from 1994 to 1996. This is attributed, among others, to the increase in the price of oil. Indeed, Nigeria is the fifth exporter with an output of about two (2) million barrels a day; furthermore, Nigeria's output of oil, during the period under review, is in excess of initial forecasts(15). Faced with such prices, Nigeria might have pumped 2.05 million barrels a day in August 1996, whereas her OPEC, quota is, 1.865 million (16) barrels a day.
53. C6te d'lvoire comes second with a surplus trade balance of 0.765 billion US dollars in 1996. As it can be observed, the devaluation has improved the trade balance of this country which has benefited from cyclical increase of world prices to boost its exports revenue. It also benefited from substantial surpluses in its trade relations with the other
countries of the franc zone as a whole, (17); the cocoa and coffee sectors also generated surpluses, especially in 1994 and 1995 (18). Finally, it should be pointed out that Cote tTIvoire
reappeared both on the oil and electricity markets (hydro-electric and thermic power) as anexporter.
54. Certain results are equally remarkable: for example, the trade deficits of Burkina Faso
and Ghana.
15. Marches Tropicaur. 15 November 1996 - Page 2434 16. Same source as above
17. Marches Tropicaaux 13.September 1996 - Page 1997 18. Same source as above
55. The most remarkable trade deficit is that of Burkina Faso (0.795 billion US dollars in 1996). This deficit kept on worsening from 1994 to 1996. Burkina Faso's export of meat and cattle which increased after the devaluation of the Franc CFA is now nose-diving and experiencing a spectacular fall.
56. According to the Department of Agro-pastoral statistics, exports of cattle, in 1995, fell by 15 percent, following a drop in demand. It was the fall in the export of fresh meat that was most dramatic (72 percent). Only 1.6 tonnes of beef was exported in 1995 as against 20.5 tonnes exported the previous year.
57. Ghana also showed a negative trade balance for the period 1994-1996; this is quite surprising, considering the efforts made by that country to improve its competitive position.
58. It is observed that without Nigeria, West Africa's trade deficit will have been 1.511
billion US dollars in 1996. This shows the crushing weight of Nigeria's trade relations as
compared to those of the other West African countries, most of which are considered as small countries with chronic trade deficit.B. THE SITUATION IN THE UEMOA COUNTRIES
59. The zone recorded a deficit trade balance in 1996 (0.213 billion US dollars as against the surplus balance obtained in 1994, amounting to 0.029 billion US dollars (year of the devaluation). This situation is explained by the fact that imports resumed with vigour after
1995, (especially importation of hard goods).
60. It is Cote d'lvoire which tops this group with a balance of 765 billion US dollars obtained in 1996, as indicated earlier on.
61. Niger occupies the second position with a balance of 0.044 billion US dollars obtained in 1996. Furthermore, just like Cote d'lvoire, Niger's trade balance has always been surplus since 1994. That country, because of the devaluation, has become competitive through the sale of cattle and other food items (niebe) on the markets of the coastal countries, ] particularly, that of Nigeria.
62. Senegal occupies the third position with a trade balance which has been constantly improving since 1994. The Trade surplus amounted to 0.040 billion US dollars in 1996.
Indeed, export of fishes increased remarkably after the devaluation.
23 Some of the activities, such as trituration of groundnuts, chemical industries (ICS) and leather, etc... have picked up again. Senegal, with the improvement in the Casamance situation, has also witnessed revival of the tourism business.
63. Then comes Benin, with a surplus trade balance which has been progressing since 1990. The trade balance was 0.030 billion US dollars in 1996. A year after the devaluation, it was in Benin that the value of exports (excluding re-exportations) has been highest, thanks to cotton <19). The integrated processing industries in the sectors for exports of agricultural products (cotton companies) have taken advantage of the devaluation .
64. The other countries, namely: Burkina Faso, Mali and Togo, in spite of the gain in competitiveness caused by devaluation, recorded deficit balances.
65. Togo had a positive trade balance in 1994, amounting to 0.111 billion US dollars (the year of the devaluation), thereby, reversing the trend in 1995-1996.
C. THE SITUATION IN THE NON-UEMOA COUNTRIES
66. The surplus trade balance of these sample countries, in 1996, was 1.313 billion US dollars. This balance is attributed almost entirely to Nigeria's trade balance, for, if Nigeria is removed from this group of countries, the 1996 trade deficit will be 1.298 billion US dollars.
67. With the exception of Nigeria and Mauritania, all the other countries recorded negative trade balances from 1994 to 1996.
68. It should be pointed out that few African countries have succeeded in diversifying the composition of exports. Almost all of them derive the essential part of their export revenue
from primary products, out of which, only three account for more than 17 percent(20) of the
value of exports. In certain cases, this percentage can be between 70 and 80 percent.
(19) (20)
MArches Tropicauxs, 26 Janvier 1996, Page 154. Record production is envisaged in the cotton sector.
World Bank Report on Development Policies. Adjustment in africa, Besults and shat remains to be done.
CHAPTER II
TREND OF THE MAIN SECTORS
69. In West Africa, it is agriculture which contributed most to creation of value added in 1996. Its contribution increased from 29.4 percent in 1994 to 34 percent in 1995, then fell slightly to 33.5 percent in 1996. It is exactly through reduction in taxation under the context of the new macro-economic measures and of the commercialisation reform that the impact of adjustment on agriculture is felt most. The reforms rendered the terms of exchange favourable to agriculture in several countries. There has been a reduction in tax imposed on cash-crop farmers in most(21) of the countries and the real prices received by the farmers in some of the countries were higher at the end of the decade than at the beginning. The reforms, seem to have boosted agricultural production.
70. The second sector is that of the other services, with a contribution of 31.4 percent to GDP in 1996. But this sector is generally foreign controlled.
71. The extractive industries occupy the third position with 16.0 percent, in terms of contribution to GDP. It is the case of oil and, to lesser extent, phosphate, bauxite and gold.
72. The fourth position goes to manufacturing industry, with 8 percent of GDP, followed successively by Public Administration, 6.5 percent, Buildings and Public Works, 3 percent
and Electricity 1.6 percent.
Borld Bank Report on development policies. Adjustment in Africa;. Reforms and what retains to be
done
Table 4. Trend of contribution of the different sectors to GDP
25
ll —
1 BRANCHES
AGRICULTURE
EXTRACTIVE INDUSTRIES MANUFACTURING INDUSTRIES ELECTRICITY
BUILDIUGS AND PUBLICS WORKS
PUBLIC ADHIHISTBftTIOHS
OTHER SERVICES
i :
TOTALS GDP ' -:
ti
l| 1994
Jl
1
29.4 \
17.5 \ 7.6 X
L 0
3 \
, 7 r. ■
33'^ ■
II
| 1995
i '■ "
7— "
34 \ 16.3 \ 8 \ 1.6 \ 3 1
"6.5 \ 30.6 % 100 %
11 ■ 1
1995 |
■ "■ 1
ti : 1
33.5 *'
16 \ ■ 8 \ 1.6 \
■■■31
' ■ 6.5 V
■ ' 31.4 %
100 X
i
Sources : ECA for the crude figures
I. THE STATE OF AGRICULTURE
A. The overall situation
73. Agricultural production increased remarkably, increasing in value from 29.318 billion US dollars in 1995 to 30.513 billion US dollars in 1996, representing an increase of 4 percent. The end result of this growth is an improved standard of living of the populace while population at the same time increased only by 2.9 percent. This positive and constant trend which persisted for some years, is confirmed by the large-scale farmers.
Table 5: Trend of agricultural production in some West African countries in billion US dollars at 1990 constant.
YEAR
COUNTRIES 1995 1996 GROWTH RATE
II B II
. COTE DMVOISE GHAHA
NIGERIA SENEGAL TOTAL = GDP
3,919-1 3.503 \ 13.175 1 1.199 \ 21.796 \
■:
4.177%
3.7451 . 13.538%
1.270%
22.7301
■
7 \ 1 \ 3 \ 6 \ i\
SOURCE: ECA ECONOMIC SURVEY OF AFRICA : 1996
74. It should, however, be noted that agriculture is a heterogenous sector which includes:
food-crop farming, espacialiy cereals whose importation weighs heavily on the trade balances of the countries of the subregion and whose shortage is often perceived as a source of fami ne, especially in the sahelian countries.
Sa^^
27
B. The food-crop farming situation, per country in 1995/1996 (22)
75. Food production has certainly increased since food aid requirements decreased between 1995 and 1996. But import requirements in 1996 in most of the countries were higher than those of 1995, as illustrated in Table 6, The situation differs from one country to another.
1. BENIN
76. In view of the random, but, generally, abundant rainfall, maize, niebe and groundnuts developed satisfactorily. Similarly, in the northern part of the country, millet and sorghum enjoyed favourable growth conditions. Output is, however, still insufficient.
77. In spite of the good harvests, prices are still high; it was, therefore, necessary to import maize and niebe from Nigeria to meet food requirements. Cereal imports in 1996 were in the neighbourhood of 255,000 tonnes; mainly rice and wheat, part of.which, was re-
exported.
78. About 20,000 Togolese refugees are still living in Benin and exerting pressure on available food items. However, the food supply situation remained satisfactory after the marketing of the harvests of the first farming-season in the soutli, and groundnuts and yam
in the north.
2. BURKINA FASO
79. Hie agricultural situation of the country in 1995 and 1996 remained very precarious up to the first six months of 1996. Food supply problems crop up from time to time, in certain habitually deficit regions. However, the 1995 production was above average.
Mostly additional data cf: FAO: Faming activities and food shortages. Oct/Hov. 1996. V 5.
80. Emergency aid was provided to about 700,000 persons in seventeen (17) provinces.
About 8,200 tonnes of cereals were withdrawn from the national security stock. This measure helped to bring down prices to 60 francs per kilo, instead of between 90 and 120 francs per
kilo.
81. Cereal import requirements for the 1995/1996 farming-season were 140,000 tonnes, while food aid requirements were 38,000 tonnes. By the first six montlis of 1996, 50 percent of such food aid requirements had been covered.
3. CAPE VERDE
82. In this country, the output of maize, a cereal generally consumed there, was about 1,000 tonnes, a figure which was less than the normal average. That of 1995 was 7,000
tonnes.
83. In spite of the poor harvest, the markets were well stocked and supplies satisfactory.
Indeed, the country depends mainly on commercial importations to meet requirements.
84. Cereal import requirements, in 1996, were expected to reach 90,000 tonnes. About 41,500 tonnes had already been annouced by the end of 1996.
4. COTE DfIVOIRE
85. Rainfall in this country was good, even resulting, sometimes, in floodings, Consequently, output of maize, rice and millet, in the northern part of the country, were good.
86. The food supply situation was satisfactory. The government had temporary limited rice importations by raising import duties from 2 to 15 percent before the liberalisation of this market scheduled for 1997. This had led to a drop in prices. The feeding of the Uberian refugees, who number about 305,000, with only a number of then continuing to benfit from aid before their on-going repatriation, and the local requirements especially wheat and rice will increase import requirements to 535,000 tonnes.
d^
29
5. GAMBIA
87. The rainfall situation was normal and there were even some floodings. The food supply situation was satisfactory, but were higher prices are higher in 1996 than they were in 1995.
88. Import requirements for 1995/1996 were expected to reach 100,000 tonnes and food aid requirement 11,000 tonnes. Cereal output was estimated at 104,000 tonnes in 1996, which was higher than that of 1995, and more than the average of the past five years.
6. GHANA
89. In Ghana, the rains fell in sufficient quantity, even if a measure of irregularity was observed at the end of March and mid-June. With the ethnic conflicts in the northern part of the country over, land areas cultivated and cereal production were above average.
90. The food supply situation was favourable in view of the good harvest of both cereals and root-crops. The country, however, continues to feed 81,000 Togolese and Liberian refugees. Rice and wheat import requirements were estimated at 250,000 tonnes in 1996.
7. GUINEA
91. The rains, which commenced in March, become generalised throughout May-June.
Farmlands recorded good harvests. But cereal import requirements in 1,996 reached 240,000 tonnes of wheat and rice. The country still has more than 400,000 Liberian refugees and 200,000 Sierra Leonian refugees to contend with. One will haveio wait for the end of the war in Liberia and Sierra Leone in order to reduce imports in this country which can be self-
sufficient.
8. GUINEA-BISSAU
92. The country recorded its first rains in May throughout the country. Torrential rains watered the country from end of August to mid-September. Production was estimated at 174,000 tonnes. The food supply situation was satisfactory. The country's cereal import requirements for 1996, for consumption and re-exportation were about 70,000 tonnes while food aid was 6,000 tonnes.
9. LIBERIA
93. In view of the un-ending war situation, an emergency aid was necessary. Production fell by more than 80 percent. The food situation has been seriously mortgaged by insecurity, successive poor harvests and the gloomy prospects in terms of food-crop production in 1996, in spite of the cease-fire declared on 18th August throughout the country.
94. The food situation, during the year under review, varied from region to region, in the West and South-East Nimba and Bong Counties.
95. Movements of people in several parts of the country, because of the conflicts, hampered any attempts to assess outputs. However, 2,600 tonnes of rice seeds had been distributed to 90,000 farmers in the central counties.
10. MALI
96. The cumulative rainfall were above average, except in the kayes and Sotuba regions where rainfall was below^ average. The state of pasture lands was generally satisfactory.
Certain predators were, however, reported (migratory, locusts, bands of larvae, granivorous birds, etc.).
97. The overall cereal production in 1996 was estimated at 2.3 million tonnes, that is, 6 percent more than that of 1995 and 4 percent more than the average of the past five years.
98. Price of millet fluctuated a lot, sometimes reaching 230 francs per kilo. Tonnes of millet were released from the national security stock. The early warning system foresaw risks of shortage and recommended that a provision of about 8,500 tonnes of food aid be made for distribution in the Kidal, Gao, Timbuktu, Mopti "arrondissements" and for the displaced Tuaregs. No commercial purchases were envisaged in 1996/1997.
31
11. MAURITANIA
99. Mauritania experienced late and random rainy season. Rainfall was below average.
It started, in earnest, in July. Swarms of desert locusts were located in several places in Adrar and Tagani. In spite of all this, the food situation was good in view of the surpluses of the past two years. Cereal production which was estimated at 208,000 tonnes in 1996 is 6 percent less than that of 1995 but higher than the normal average. Pasture lands have regenerated.
100. Cereal importations including re-exportations for the 1995/1996 farming season, was about 250,000 tonnes, while food aid requirement was about 50,000 tonnes. For logistic reasons, the country recorded an increase in rate of malnutrition, especially, among children.
Movement of refugees has also been observed in the country. They are either Tuaregs returning to Mali, or nationals coming from Senegal (60,000) after leaving their country because of the troubles that occurred these in 1989.
12. NIGER
101. Like some of the Sahelian countries, Niger, in 1994 and 1995 recorded harvests higher than those of the year under review. Reserves of cereals were, therefore, used to reduce the deficit of the 1996 farming season. The food situation, at the national level, was however, alarming in several regions of the country. Indeed, the government had, right from the beginning of the year, embarked on public enlightenment compaign. The food crisis prevention system of the club of the Sahel organised a meeting to re-assess the situation. It estimated the emergency food aid requirement at 50,000 tonnes of cereals. Part of this aid was covered from the national security stock whose level remains very low. Local purchases were also made.
102. Cereal import requirement, for the period under review, was estimated by FAO at 200,000 tonnes. But the general assessment of the farming season showed a cereal deficit of 118,000 tonnes, part of which the government tried to cover by appealing to the donor community. Price of cereals was very high.
13. NIGERIA
103. Rainfall in this country was enough for production of maize, millet, sorghum and rice.
Following the good harvest of 1995, the food supply situation was satisfactory. But the 1996 production was expected to be less than that of 1995, because of shortage of fertilisers, pesticides and improved seeds was reported during the planting period. This situation was attributed to the ban on importations and the problems inherent in distribution of local productions,
104. To reduce post-harvest losses, the government had launched a programme for storage of food items, the cereal import requirements for October/November 1996, were estimated at 1,020,000 tonnes, including 700,000 tonnes of wheat and 250,000 tonnes of rice.
14. SENEGAL
105. There were heavy rainfalls in certain parts of the south but insufficient in the north.
Rainfall was irregular throughout the country. Swarms of desert locusts were reported in the river valley, in Richard Toll.
106. The joint FAO/CILSS mission for assessment of harvests estimated the overall cereal production at 1.1 million tonnes in 1996 a volume near the 1995 level and above average.
107. The overall food supply situation was alarming with a general increase in the price of cereals during the lean season. Local purchases were needed in the south to provision the deficit areas of the North.
108. Rice and wheat import requirements for the 1995/1996 marketing season were in the neighbourhood of 700,000 tonnes while food aid requirements were 27,000 tonnes. About 4,000 Mauritanian refugees exerted pressure on the national stock before their repatriation.
33
15. SIERRA LEAONE
109. Rainfall was still good in the country. But internal troubles and emmigrations have had some serious effects on all agricultural activities. Ricerfarming which accounts for about 80 percent of the country's cereal output, had greatly suffered. Ceral production which was estimated at 340,000 tonnes in 1995, accounted for only 60 percent of the national average production. This situation, like in several countries of the subregion, did not palliate the fall in the 1996 production. According to estimates, more than 750,000 refugees and persons displaced within the country are assisted on permanent basis, not counting the 200,000 refugees in Guinea, who could have participated in production.
16. TOGO
110. Rainfall started in early April and continued throughout the season, with some few
interruptions. The main crops in the south (maize) and in the North (millet and sorghum)behaved nicely. Cereal import requirement were estimated at 160,000 tonnes in 1996
(importation and re-exportation). As it was the case in 1995, the food situation was satisfactory. Prices were contained, with inflation dropping to 8 percent. The country was, however, expected to put up with 6,000 Ghanaian refugees.Table 6. Cereal import requirements of the West African counuies for the year 1995/1996 (in thousands of tonnes)
COUNTRIES
WSST AFRICA COASTAL AREAS BENIN
COTH D'lVOIRE GHANA
GUINEA LIBERIA NIGERIA SIERRA LEOHE TOGO
SABELIAN ZONE BURKINA FASO CAPE VERDE GAMBIA GUINEA-BISSAU MALI
MAURITANIA NIGER SENEGAL
COMMERCIAL YEAR
1994/1995 OR 1995 ACTUAL IMPORTATIONS
COMMERCIAL PURCHASES
3758.0 2415.0 85.4 444.2 221.0.
320.0 16.5 1070.2 150.3 107.4 1343.0 96.2 16.9 97.4 57.5 65.4 193.7 123.9 692.0
FOOD AID
643.5 441.6 16.9 55.2 97,0 6.2
233.8 0.0 27.8 4.7 201.9 42.7 70.9 3.2 1.7 17.2 28.1 12.8 25.3
TOTAL COMMERCIAL PURCHASES AND AID
4401.5 2856.6 102.3 499.4 318.0 326.2 250.3 1070.2 178.1 112.1 1544.9 138.9 87.8 100.6 59.2 82.6 221.8 136.7 717.3
1995/1996 OR 1996 ESTIMATED
TOTAL IMPORTS REQUIREMENTS
(EXCLUDING RE-EXPORTA TIONS]
4393 2753 100 530 250 240 230 1020 245 138 .
1640 140 90 100 65 105 240 200 700
PRESENT IMPORT SITUATION
TOTAL COMMERCIAL PURCHASES.
AND AID
3062.9 2589.8 94.4 587.0 250.0
67.0 . 244.2 1230.6 78.1 38.5 473.10 69.2 61.2 19.1 11.6 5.9 107.7 34.2 164.2
FOOD AID ALLOCATED
OR DISPATCHED
544.1 391.4 8,5 35.3 34.3 5.0 233.0 0.0 72.3 3.0 152.7 37.7 41.6 5.1 6.1 5.9 18.8 16.2 21.3
COMMERCIAL PURCHASES
2518.8 2198.4 85.9
551.7
'215.7 62.0 11.2 1230.6 5.8 35.5 320.4 31.5 19.6 14.0 5.5 0.0 88.9 18.0 142,9
SOURCE: FAO-CROPS AND FOOD SHORTAGES, OCTOBEE/HOTOMSBK 1996
35
C. CASH-CROP FARMING
111. The term, "cash-crop farming" refers mainly to the type of farming activity whose products are essentially put up for sale in the world market. We shall, in an absolute and relative manner, examine the most important of such products.
I. COCOA
112. The world output of cocoa-beans for the on-going 1995/1996 cocoa season increased from 119,000 tonnes to 2,664,000 tonnes as compared to the December 1995 forecast. This overall increase reflects essentially the better harvests envisaged in West Africa, particularly, in the two leading, cocoa producing countries.
113. The forecasts which the International cocoa Organisation had on Cote d'lvoire and which are based on reports of record production compiled from arrivals at the ports, increased by 100,000 tonnes to 1,050,000 tonnes. Thus, the cumulative exports for the first nine months of the 1995/1996 season (October to September) total 1,005,461 tonnes as against 719,063 tonnes during the same period of the previous season. On the other hand, Cote d' Ivoire' s cumulative exports of cocoa by-products (liquor, powder, butter and oil-cake) were 45,258 tonnes for the first nine months of the 1995/1996 farming seasons, as against 37,809 tonnes (23) the previous year. Cote d'lvoire is the world's leading exporter.
114. Cocoa output, the second source of foreign exchange in Ghana is expected
to reach 375,000 tonnes, that is, 45,000 tonnes more than the previous forecasts and 65,000 more, than the 1995 production. Cocoa is still the key sector of agriculture. Six million people earn their living from this sector, that is, 40 percent of the total population. In 1960, Ghana was the world's leading producer producing one-third of the worlds output. Cocoa production fell sharply between 1960 and 1983, dropping from 550,000 tonnes to 159,000 tonnes. In 1994/1995, Ghana produced 275,000 tonnes and the estimates for 1995/1996 are 375,000 tonnes. The Government has opted for a prudent liberalisation, it has abolished the inefficient State structures. The sttaff of the Ghana Cocoa Board (cocobod) has been trimmed down from 125,000 in 1980 to 11,000 as at 1995. The monopoly for internal marketing of cocoa exercised by cocobod'came to an end in 1992, private businessmen have, since, been authorised to buy cocobod on the local market. The Government has sold out the State plantations and three (3) of the four (4) processing plants.
(23) Marches Tropicaux 2 Aout 1996, Page 1701
115. The primary objective is to render the sector operational from now on, by attracting the young city-dwellers to the countryside. Numerous projects have been realised with a view to improving the living conditions of the farmers (road infrastructure, water and electricity supply). The selling conditions are quite favourable, to the farmers: a kilo of cocoa-beans is bought at 840 cedis since 24th June (that is 0.73 dollar) as against 700 cedis in 1994. Whereas a kilo of cocoa-beans is bought at 0.42 dollar in Cote d' Ivoire. The government has instituted this 20 percent price increase in nominal value because of inflation and depreciation of the
cedi in relation to the dollar.
116. Cocoa farmers are exempted from income-tax. The second objective is to increase the share of the farmers in the export process (from 50 to 60 percent) and to boost the local
processing process.
117. The Omanhene Cocoa Bean Company has started selling high-quality chocolate to the United States. The Government also intends to institute a vast training programme to limit deforestation in the Western part of the country (rotation, replanting). Planters are encouraged to replace the aged trees through planting of more resistant hybrides. Donor agencies promised on 20* June 1995 to grant aid to the tune of 1.6 billion dollars on condition that the country liberalises the external cocoa trade.
118. Nigeria processes about 35,000 tonnes of cocoa beans a year, according to reliable estimates. The authorites had even planned to process 275,000 tonnes in 1993, that is, double the annual output of cocoa. One of the most promising and realistic projects was that of lie- Oluji Cocoa Products Company. It was planned to process about 30,000 tonnes per year, yet it has never been operating beyond 20 percent of its capacity.
119. In early 1990s, the entire sector was heavily indebted as a result of the policy of the authorities to increase the value added of Nigeria's second export commodity after oil. It is against this background that, between 1989 and 1991 the "Nigerian Export Credit Guarantee and Insurance Corporation" lent out nearly 61 million dollars to 17 enterprises for them to purchase or modernize some factories. The greater part of this money came from the loans granted by the African Development Bank on preferential conditions. But the Naira lost more than half of its value between 1990 and 1994, and the operators had to pay back more than twice of what they borrowed. The powdering plants also had to.pay much more for the beans as the exchange regulation in force encouraged buyers to purchase cocoa at a price higher than what is paid on the world market. Others have taken this loan without constructing even
their factory.
37
120. The industries are facing the usual difficulties, that is to say, they do not have the capital needed to constitute sufficient stock to make their machines operate at full capacity.
Furthermore, processing operations have to compete with industries, notably, those of Europe which have more experience and which operate with considerable economies of scale and have the capacity to produce exactly the volumes needed by the markets. Nigeria's total production increased from 142,700 tonnes in 1995 and will probably be 145,000 tonnes in
1996.
121. In Togo, the cocoa-growing area is still South-West of the country, along the border with Ghana (24). It covers three regions: the Kioto region where cocoa and coffee are cultivated together, the AKposso-Akekou Plateau where coffee dominates and the Litime region (characterised by monoculture of cocoa). As the plantations have aged, output has
fallen these past.years.-.
122. In 1963, the Governement established the "Societe de Renovation du Cafe et du Cocoa (SRCC)" replaced in 1992 by the support structure to the coffee/cocoa sector. Cocoa output is highly random. After the fall in 1990 (7,288 tonnes) and 1994 (3,810 tonnes); it stabilised in 1995, at 7,800 tonnes. The farms are very small (around 400 hectares). Like, coffee, the devaluation of the Franc CFA, geared towards increasing world prices and producer prices, has stimulated cultivation of cocoa. Exports have doubled in value, increasing from 2.3 billion CFA franc in 1993/1994 to 4.5 billion in 1994/1995. A programme (1996/1998) is being executed to revive the sector. The activities involve taking inventory of and renovating existing plantations, phytosanitary protection, promotion of farmer-organisations and organisation of the sector, the objective for the year 1997 is to produce 8,000 tonnes.
123. Guinea and Sierra Leone also produce cocoa, but in small quantities as compared to the afore-mentioned countries. Guinea's total output increased from 3,300 tonnes in 1995 to 3,500 tonnes in 1996; that of Sierra-Leone has been stable (2,800 tonnes in 1995 and 1996).
The price of cocoa went up in 1996; one tonne costing 1,300 pounds, the highest price-level
since two years. This was attributed to increase in demand.
E24!. Marches Tropicaux - ftvril 1996, Page 816
2. COTTON
124. This farming activity has made remarkable strides in the subregion. It has made a substantial financial contribution to the countries which engage in such fanning.
125. Mali, the leading, producer in West Africa (405,000 tonnes since 1996 <25) is second in Africa after Egypt. Cotton accounts for 12 percent of the agricultural value added, 15
percent of GDP, and nearly 50 percent of export revenue of that country. The cotton sectoris the mainstay of the Malian economy and it gives that country an enviable position in the
sahetian region. About 125,000 farmers are engaged in cotton farming and the averagesurface area of farmlands is about 8 hectares. As the main cash-crop, cotton thrives presently in the Fana, Bougouni, Sikasso, Koutiala San et Kita areas and its boom has largely been the fruit of the "Compagnie Malienne des Textiles (CMDT). Output of cotton-fibre fell from 134,000 tonnes in 1992/1993 to 100,600 tonnes in 1993/1994, only to stabilize at 128,188 tonnes in 1994/1995. The devaluation which coincided with the recovery of world price of cotton-fibre, has had some positive effects on the sector which has become competitive and profitable/Export revenue increased from FCFA 39.2 billion in 1993 to 79.7 billion in 1994
and are estimated at 124 billion for 1995.126. The second producer is now Benin with 350,000 tonnes. Benin is, therefore, ahead of Cote d'lvoire whose output of 209,000 tonnes is less than 25 percent of the 1988-1989
record production.
127. Cotton output for the 1994-1995 season in Cote d'lvoire was completely below expectations, (217,000 tonnes as against the 250,000 tonnes (26> expected) in spite of the guaranteed price paid to producers which had increased by nearly 6 percent and the price of
inputs which had remained stable.
128. Cote d'lvoire was the first country to make considerable efforts by mechanising cotton
production. But since 1990, one has been witnessing stagnation and even a kind of regression because of the cost recovery process, privatisation of the "Compangie Ivoirienne pour le Developpement des Textiles (CIDT). But the revival of the cotton industry will require an
affirmed political will and further mobilisation of ressources.
(25). Harries tropicaux. Mali 28 Juia 1996. Page 1354 t26!. Hardies Tropicaux: Le 5 juillet, page 1403
